Posts Tagged ‘retirement savings account’

3 Benefits of a Roth IRA

Posted October 14, 2008 by Bernz

What’s a Roth IRA? It’s an individual retirement arrangement (aka retirement savings account) you fund with after-tax dollars. The money you contribute goes into your account and continues to grow without you having to pay any tax related costs. In other words, when the time comes for you to make a withdrawal, every cent you take out goes back into your wallet.

Part of what makes Roth IRAs so appealing is its tax-friendly quality. But there are 3 major benefits of a Roth IRA:

• You can contribute money regardless of your age and for as long as you like

• You can leave the money in the account without having to make minimum monthly withdrawals (something you must do with traditional IRAS)

• You can withdraw money whenever you want for any reason (but if you’re younger than 59½ you’ll face early withdrawal penalties unless you can prove you have a qualifying reason such as college tuition, medical expenses, or a first-time home purchase).

Thinking of starting a Roth IRA? If so you’ll need to make sure you meet these taxable income guidelines:

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